Question

You want to buy a new car, but you know that the most you can afford for payments is $ 375 per month. You want 48 month financing, and you can arrange such a loan at 6 percent compounded monthly. You have nothing to trade and no down payment. The most expensive car you can purchase is (1) an old junker for $ 4,000, (2) a Honda Civic for $ 10,000, (3) a Ford Escort for $ 14,000, (4) a Toyota Camry for $ 17,000, or (5) an Infiniti G35 for $ 24,000.